Written by Rachel Pierstorff, ESLLC 2015-2016
For many environmentally-conscious homeowners, the prospect of installing a solar energy home is appealing, but unrealistic. After all, paying for around 20 years of energy bills upfront rather than monthly or annually is daunting. The average 5kW solar system (residential systems range from 4-8kW depending on where you live) costs upwards of $25,000. Here in Colorado, the figure sits around $17,500 in upfront costs. However, this price tag deters many potential solar investors because it masks the plentitude of incentives available for those who choose to go solar.
The website www.solarpowerrocks.com functions as a comprehensive, state-by-state guide to anyone interested in harnessing the sun’s energy and minimizing their dependency on coal-sourced electricity. Each state receives a grade letter rating based on the benefits provided to solar system owners, which is calculated from a variety of factors including state laws regarding solar, cost of electricity, net metering ability, tax credits and rebates available, and taxation policies, among others.
Each factor falls into two categories: policy and incentives. Below is a brief analysis of Colorado’s solar policy and incentives.
In terms of policy, Colorado ranks 5th in the nation for its Renewable Portfolio Standard, which is a law that “mandates that a certain percentage of all energy generation comes from renewable sources by a certain date.” Simply put, the stronger the RPS, the better the incentives offered to homeowners to go solar. Additionally, the RPS contains stipulations that require utilities incorporate certain amounts of solar power, called solar carve-out. Colorado also has excellent net metering policies, which allow a homeowner to sell excess solar energy back to the grid. Despite these beneficial policies, Colorado is sits in the middle of the country in terms of electricity prices. This means that, while power is relatively cheap, there is less comparative incentive to switch to solar. Furthermore, cheap electricity comes from coal—an extremely harmful fossil fuel, the burning of which directly contributes to global warming and climate change.
Thankfully, a plethora of financial incentives exist in the Rocky Mountain State to ease the burden of a solar system installation. Rebates vary depending on the utility company and county and the requirements dictated by each, you can earn about $1/watt, a $300-500 flat rebate, or $200-750/kW. Likewise, cities like Aurora and Lakewood refund 100% of the solar installation permit fee. Additionally, because solar panels can increase your home’s value by almost 20 times your annual energy bill savings, Colorado incentivizes the solar switch by making the system property tax exempt.
In addition to a national tax credit that takes 30% off of the price of your solar system, Colorado’s policies and incentives shrink the first year cost of your solar system to $11,361. By no means a small figure, but an investment that has the potential to earn roughly $22,000 in profit from 2027-2040, increase home value by $18,000, and save $74 on your monthly electricity bill. The point is, the upfront cost of solar panels doesn’t factor in all of the potential benefits.
For all the information you need to go solar in any state in the country, visit www.solarpowerrocks.com.
“Colorado Solar Power.” Solar Power Rocks. N.p., n.d. Web. 05 Apr. 2016. <https://solarpowerrocks.com/colorado/#rebates>.
“How Much Do Solar Panels Cost to Install on a US Home?” Solar Power Authority. N.p., 19 Apr. 2012. Web. 05 Apr. 2016. <https://www.solarpowerauthority.com/how-much-does-it-cost-to-install-solar-on-an-average-us-house/>.